2017 May Board Book

National Dairy Situation & Outlook USDA Estimates

Federal Order Minimum Class Prices

Hundredweight Prices Class I

Feb.

Mar.

Apr.

Phoenix, Arizona Portland, Oregon Boston (Northeast)

$19.08 $18.63 $19.98 $16.88

$19.25 $18.80 $20.15 $15.81

$18.40 $17.95 $19.30

Milk Production 1

Monthly: USDA estimates overall milk production across the U.S. decreased 1.0% in February 2017, compared to February 2016. USDA reports that California milk production decreased 5.4% compared to February 2016 (with 15,000 less cows and 85 less pounds of milk per cow). Among other western states, compared to February 2016, Arizona was down 0.7%; New Mexico was up 7.8%; andWashington was down 5.6%. Four of the top ten milk producing states reported a production increase. The largest percent increase was reported by Texas at 12.3% growth in milk production (on 40,000 more cows and 60 more pounds of milk per cow). Quarterly: For the fourth quarter of 2016 compared to the third quarter of 2016, U.S. milk cow numbers increased to 9.344 million head, milk production per cow decreased to 5,620 pounds; the net effect was a decrease in milk production to 52.5 billion pounds. USDA projects that for the first quarter of 2017 compared to the fourth quarter of 2016, milk cow numbers will increase to 9.365 million head, production per cow will increase to 5,750 pounds; the net effect would be an increase in milk production to 53.8 billion pounds. Milk Prices Comparing the fourth quarter of 2016 to the third quarter of 2016, U.S. average all-milk prices increased from $16.83/cwt. to $17.67/cwt. USDA projects that for the first quarter of 2017, U.S. average all-milk prices will be $18.15-$18.35/cwt.; Class III prices will be $16.45-$16.65/cwt.; and Class IV prices will be $15.40-$15.70/cwt. Utility Cow Prices Comparing the fourth quarter of 2016 to the third quarter of 2016, average U.S. utility cow prices were down $15.41/cwt. to a national average of $57.75/cwt. USDA projects that utility cow prices will average $60-$63/cwt. in the first quarter of 2017.

Class III

N/A

USDA Dairy Cow Culling Activity

Region 9 1 Dairy Cows

U.S. Dairy Cows

West Region 2 Price Range

Week Ending

Head

Head

$/cwt.

02/17/17

18,900

62,600

$56-$56

02/24/17

17,700

61,000

$56-$56

03/03/17

18,300

62,200

$56-$58

03/10/17

17,300

63,000

$57-$57

1 Region 9 includes AZ, CA, HI and NV 2 West region includes AZ, NV, UT, CA, ID, OR andWA

Source: USDA Market News: Report LM_CT168 and SJ_LS714

USDA Commercial Cold Storage Report

Butter American Cheese Nonfat Dry Milk 2016 2017 2016 2017 2016 2017 In Million Pounds

Month

January

192

222

716

752

226

227

February

236

283

716

774

217

260

March

243

726

232

April

296

734

252

May

325

758

232

June

328

757

231

July

333

770

257

August

319

742

235

September

269

743

216

October

228

736

225

November

161

713

215

December

166

726

228

Source: USDA, Farm Services Agency, NASS Cold Storage and Dairy Products. (As published in the Dairy Market News)

Top Ten Milk Production States - Feb. 2017 1 (Percent Change from Same Month/Previous Year)

USDA Milk-Feed Price Ratio

USDA reports that the milk-feed price ratio for February 2017 was 2.61 (down from 2.69 in January 2017). The current ratio of 2.61 means that a dairy producer can buy 2.61 pounds of feed for every pound of milk sold. The prices used to calculate the February 2017 milk-feed price ratio were: corn $3.44/bushel; soybeans $9.86/bushel; alfalfa hay $129/ton; all-milk price $18.50/cwt. (decreased from $18.90/cwt. in January 2017). Prices used to calculate the milk-feed price ratio are based on U.S. prices and don’t necessarily reflect California prices.

-5.4% -2.1% +0.2% -2.7 % +12.3%

1. California 2. Wisconsin 3. New York

6. Michigan

+1.2% -0.7% -0.6% +7.8% -5.6%

7. Pennsylvania 8. Minnesota 9. New Mexico 10. Washington

4. Idaho 5. Texas

Information from the USDA-NASS publication “Milk Production” and the USDA-ERS publication: “Livestock, Dairy, and Poultry Outlook.” 1 Feb. 2016 compared to Feb 2017 includes an additional day due to leap year.

California Dairy Review

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